History of currencies suggests US dollar’s dominance may fade – but it will happen slowly

Barry Eichengreen's new book 'Money Beyond Borders' examines the historical rise and fall of dominant international currencies, from Athenian 'owls' to the US dollar.

Historically, dominant currencies like the Roman denarius, Byzantine gold solidus, Florentine gold florin, Spanish real, Dutch guilder, and British pound sterling eventually faded as their issuing nations' economic and political power declined.

The US dollar became the dominant global currency after the establishment of the US central bank in 1913, US economic growth, and the weakening of the UK after World War I.

China has overtaken the US on some economic measures, but the dollar still dominates international finance and trade, suggesting a slow decline may be ahead.

Eichengreen argues that currencies that maintain consistent weight, fineness, and design, like the florin, build confidence, but political stability and economic advancement of the issuing nation are key factors.